Govt restricts what IKEA can sell in India: Reports

Tags: Ikea, News
The government has placed tight restrictions on what IKEA can sell in the country, in what would be the latest hitch for the furniture seller as it plots 1.5 billion euros expansion there, newspapers reported.

The finance ministry has forbidden IKEA from selling items including textile products and office supplies, cutting the number of product categories the company can sell to 15 from 29, a business daily reported.

The Sweden-based retailer was initially wary of entering India as it faced stiff local sourcing rules, which India later relaxed.

It was not immediately clear whether any further product restrictions would delay or alter IKEA's investment plans.

"IKEA is waiting for the formal notification of the details regarding the content of the latest approval from FIPB," an IKEA spokeswoman in India said on Friday, referring to the Foreign Investment Promotion Board, part of the finance ministry which clears investment proposals from international companies.

"We will have to look into the details and review what it means for us. We will be able to comment after that," she added.

The government has presented IKEA's planned entry as a sign that foreign investors have kept faith with Asia's third-largest economy, at a time when growth has declined and political protests have erupted over expansion by foreign firms.

India has thrown open its doors to foreign retailers this year, liberalising its investment rules to allow in global supermarket chains and as well as lifting an investment cap on single-brand retailers such as IKEA.

But the rule changes have provoked a furious backlash from some political parties and domestic retailers, a reaction which threatens to derail a package of pro-market reforms aimed at reviving growth.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • India is still in denial about the reality of marital sexual abuse

    When Haribhai Parathibhai Chaudhary, our minister of state for home, declared in Parliament the other day that there was no such thing as marital rape

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

Sarthak Raychaudhuri

vice-president, HR, Asia South Whirlpool of India

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

TODAY'S COLUMNS

Varun Dutt

<b>Riskfactor</b>: Overdose of hope

As a conservative estimate, at least half of all new ...

Zehra Naqvi

Translated nuances

Translating a book from another language is a tough job, ...

Bubbles Sabharwal

Don’t let bullies get away, stand up to them

Boarding schools can be like a totalitarian regime. It can ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture